Hedge funds play the Maxis takeover story

A $240 million block trade in Maxis shares is completed at a 0.5% discount to the adjusted buyout offer, providing hedge funds with an arbitrage opportunity.

An existing shareholder of MalaysiaÆs leading mobile phone operator Maxis Communications yesterday decided to sell the equivalent of a 2% stake in the company, which is currently the subject of a $4.6 billion buyout bid from its controlling shareholder, billionaire T. Ananda Krishnan.

The off-market block trade, which was arranged by Morgan Stanley, was done at a discount to KrishnanÆs outstanding offer price, resulting in an arbitrage opportunity. According to a source familiar with the transaction, some 10 hedge funds,...